Item 16. FORM 10-K SUMMARY

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Item 16. FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	TE CONNECTIVITY PLC

	By:	/s/ Heath A. Mitts
		Heath A. Mitts
		Executive Vice President
		and Chief Financial Officer
		(Principal Financial Officer)

Date: November 12, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date


/s/ Terrence R. Curtin	Chief Executive Officer and Director	November 12, 2024
Terrence R. Curtin	(Principal Executive Officer)

/s/ Heath A. Mitts	Executive Vice President,
Heath A. Mitts	Chief Financial Officer, and Director	November 12, 2024
	(Principal Financial Officer)

/s/ Robert J. Ott	Senior Vice President and
Robert J. Ott	Corporate Controller	November 12, 2024
	(Principal Accounting Officer)

*	Director	November 12, 2024
Jean-Pierre Clamadieu

*	Director	November 12, 2024
Carol A. Davidson

*	Director	November 12, 2024
Lynn A. Dugle

*	Director	November 12, 2024
Sam Eldessouky

*	Director	November 12, 2024
William A. Jeffrey

*	Director	November 12, 2024
Syaru Shirley Lin

*	Director	November 12, 2024
Abhijit Y. Talwalkar


Signature	Title	Date

*	Director	November 12, 2024
Mark C. Trudeau

*	Director	November 12, 2024
Dawn C. Willoughby

*	Director	November 12, 2024
Laura H. Wright

*	John S. Jenkins, Jr., by signing his name hereto, does sign this document on behalf of the above noted individuals, pursuant to powers of attorney duly executed by such individuals, which have been filed as Exhibit 24.1 to this Report.


	By:	/s/ John S. Jenkins, Jr.
		John S. Jenkins, Jr.
		Attorney-in-fact

TE CONNECTIVITY LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)		56
Consolidated Statements of Operations for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022		59
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022		60
Consolidated Balance Sheets as of September 27, 2024 and September 29, 2023		61
Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022		62
Consolidated Statements of Cash Flows for the Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022		63
Notes to Consolidated Financial Statements		64
Schedule II—Valuation and Qualifying Accounts		101

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of TE Connectivity plc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of TE Connectivity Ltd. and subsidiaries (the "Company") as of September 27, 2024 and September 29, 2023, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows, for each of the three years in the period ended September 27, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 27, 2024 and September 29, 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 27, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 27, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 12, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes — Realizability of Deferred Tax Assets — Refer to Notes 2 and 15 to the financial statements

Critical Audit Matter Description

The Company recognizes deferred income taxes for temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character prior to expiration. Sources of taxable income include future reversals of deferred tax assets and liabilities, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies. Management has determined that it is more likely than not that sufficient taxable income will be generated in the future to

realize a portion of its deferred tax assets, and therefore, a valuation allowance of $8.3 billion has been recorded to offset the Company’s gross deferred tax assets as of September 27, 2024 of $12.2 billion.

We identified the realizability of certain deferred tax assets as a critical audit matter because of the Company’s tax structure and the significant judgments and estimates made by management to determine that sufficient taxable income will be generated in the future prior to expiration to realize a portion of its deferred tax assets. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate the appropriateness of qualifying tax planning strategies and the reasonableness of management’s estimates of taxable income prior to expiration.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the determination that it is more likely than not that sufficient taxable income will be generated in the future to realize certain deferred tax assets included the following, among others:

	•	We tested the effectiveness of controls over management’s estimates of the realization of the deferred tax assets, including those over the estimates of taxable income, the approval of tax planning strategies and the determination of whether it is more likely than not that the deferred tax assets will be realized prior to expiration.

	•	We evaluated the reasonableness of management’s assessment of the significance and weighting of negative evidence and positive evidence that is objectively verifiable.

	•	We evaluated management’s ability to accurately estimate taxable income by comparing actual results to management’s historical estimates and evaluating whether there have been any changes that would impact management’s ability to continue accurately estimating taxable income.

	•	We tested the reasonableness of management’s estimates of taxable income by comparing the estimates to:

	–	Historical taxable income.

	–	Internal communications to management and the board of directors.

	–	Management’s history of carrying out its stated plans and its ability to carry out its plans considering contractual commitments, available financing, or debt covenants.

	•	We evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.

	•	We evaluated whether the taxable income in prior carryback years was of the appropriate character and available under the tax law.

	•	With the assistance of our income tax and other specialists, we evaluated (1) the appropriateness of qualifying tax planning strategies, including that they were prudent, feasible and would more likely than not result in the realization of deferred tax assets and (2) management’s assessment that sufficient taxable income will be generated in the future to realize a portion of the deferred tax assets prior to expiration.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

November 12, 2024

We have served as the Company’s auditor since 2007.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of TE Connectivity plc

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of TE Connectivity Ltd. and subsidiaries (the “Company”) as of September 27, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 27, 2024, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended September 27, 2024, of the Company and our report dated November 12, 2024 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania

November 12, 2024

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022


	Fiscal
	2024		2023		2022

	(in millions, except per share data)
Net sales	$	15,845	$	16,034	$	16,281
Cost of sales		10,389		10,979		11,037
Gross margin		5,456		5,055		5,244
Selling, general, and administrative expenses		1,732		1,670		1,584
Research, development, and engineering expenses		741		708		718
Acquisition and integration costs		21		33		45
Restructuring and other charges, net		166		340		141
Operating income		2,796		2,304		2,756
Interest income		87		60		15
Interest expense		(70)		(80)		(66)
Other income (expense), net		(16)		(16)		28
Income from continuing operations before income taxes		2,797		2,268		2,733
Income tax (expense) benefit		397		(364)		(306)
Income from continuing operations		3,194		1,904		2,427
Income (loss) from discontinued operations, net of income taxes		(1)		6		1
Net income	$	3,193	$	1,910	$	2,428

Basic earnings per share:
Income from continuing operations	$	10.40	$	6.04	$	7.51
Income (loss) from discontinued operations		—		0.02		—
Net income		10.40		6.06		7.52

Diluted earnings per share:
Income from continuing operations	$	10.34	$	6.01	$	7.47
Income (loss) from discontinued operations		—		0.02		—
Net income		10.33		6.03		7.47

Weighted-average number of shares outstanding:
Basic		307		315		323
Diluted		309		317		325

See Notes to Consolidated Financial Statements.

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022


	Fiscal
	2024		2023		2022

	(in millions)
Net income	$	3,193	$	1,910	$	2,428
Other comprehensive income (loss):
Currency translation		131		261		(510)
Adjustments to unrecognized pension and postretirement benefit costs, net of income taxes		(37)		20		259
Gains (losses) on cash flow hedges, net of income taxes		76		65		(95)
Other comprehensive income (loss)		170		346		(346)
Comprehensive income		3,363		2,256		2,082
Less: comprehensive (income) loss attributable to noncontrolling interests		(7)		(9)		19
Comprehensive income attributable to TE Connectivity Ltd.	$	3,356	$	2,247	$	2,101

See Notes to Consolidated Financial Statements.

TE CONNECTIVITY LTD.

CONSOLIDATED BALANCE SHEETS

As of September 27, 2024 and September 29, 2023


	Fiscal Year End
	2024		2023

	(in millions, except
	share data)
Assets
Current assets:
Cash and cash equivalents	$	1,319	$	1,661
Accounts receivable, net of allowance for doubtful accounts of $32 and $30, respectively		3,055		2,967
Inventories		2,517		2,552
Prepaid expenses and other current assets		740		712
Total current assets		7,631		7,892
Property, plant, and equipment, net		3,903		3,754
Goodwill		5,801		5,463
Intangible assets, net		1,174		1,175
Deferred income taxes		3,497		2,600
Other assets		848		828
Total assets	$	22,854	$	21,712
Liabilities, redeemable noncontrolling interests, and shareholders' equity
Current liabilities:
Short-term debt	$	871	$	682
Accounts payable		1,728		1,563
Accrued and other current liabilities		2,147		2,218
Total current liabilities		4,746		4,463
Long-term debt		3,332		3,529
Long-term pension and postretirement liabilities		810		728
Deferred income taxes		199		185
Income taxes		411		365
Other liabilities		870		787
Total liabilities		10,368		10,057
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests		131		104
Shareholders' equity:
Common shares, CHF 0.57 par value, 316,574,781 shares authorized and issued, and 322,470,281 shares authorized and issued, respectively		139		142
Accumulated earnings		14,533		12,947
Treasury shares, at cost, 16,656,681 and 10,487,742 shares, respectively		(2,322)		(1,380)
Accumulated other comprehensive income (loss)		5		(158)
Total shareholders' equity		12,355		11,551
Total liabilities, redeemable noncontrolling interests, and shareholders' equity	$	22,854	$	21,712

See Notes to Consolidated Financial Statements.

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022


											Accumulated
											Other		Total
	Common Shares			Treasury Shares			Contributed		Accumulated		Comprehensive		Shareholders'
	Shares	Amount		Shares	Amount		Surplus		Earnings		Income (Loss)		Equity

	(in millions)
Balance at fiscal year end 2021	336	$	148	(9)	$	(1,055)	$	—	$	11,709	$	(168)	$	10,634
Net income	—		—	—		—		—		2,428		—		2,428
Other comprehensive loss	—		—	—		—		—		—		(327)		(327)
Share-based compensation expense	—		—	—		—		119		—		—		119
Dividends	—		—	—		—		—		(714)		—		(714)
Exercise of share options	—		—	—		54		—		—		—		54
Restricted share award vestings and other activity	—		—	1		20		(119)		116		—		17
Repurchase of common shares	—		—	(10)		(1,409)		—		—		—		(1,409)
Cancellation of treasury shares	(5)		(2)	5		709		—		(707)		—		—
Balance at fiscal year end 2022	331	$	146	(13)	$	(1,681)	$	—	$	12,832	$	(495)	$	10,802
Net income	—		—	—		—		—		1,910		—		1,910
Other comprehensive income	—		—	—		—		—		—		337		337
Share-based compensation expense	—		—	—		—		123		—		—		123
Dividends	—		—	—		—		—		(737)		—		(737)
Exercise of share options	—		—	1		43		—		—		—		43
Restricted share award vestings and other activity	—		—	1		109		(123)		33		—		19
Repurchase of common shares	—		—	(8)		(946)		—		—		—		(946)
Cancellation of treasury shares	(9)		(4)	9		1,095		—		(1,091)		—		—
Balance at fiscal year end 2023	322	$	142	(10)	$	(1,380)	$	—	$	12,947	$	(158)	$	11,551
Net income	—		—	—		—		—		3,193		—		3,193
Other comprehensive income	—		—	—		—		—		—		163		163
Share-based compensation expense	—		—	—		—		127		—		—		127
Dividends	—		—	—		—		—		(782)		—		(782)
Exercise of share options	—		—	1		89		—		—		—		89
Restricted share award vestings and other activity	—		—	—		213		(127)		(81)		—		5
Repurchase of common shares	—		—	(14)		(1,991)		—		—		—		(1,991)
Cancellation of treasury shares	(6)		(3)	6		747		—		(744)		—		—
Balance at fiscal year end 2024	316	$	139	(17)	$	(2,322)	$	—	$	14,533	$	5	$	12,355

See Notes to Consolidated Financial Statements.

TE CONNECTIVITY LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022


	Fiscal
	2024		2023		2022

	(in millions)
Cash flows from operating activities:
Net income	$	3,193	$	1,910	$	2,428
(Income) loss from discontinued operations, net of income taxes		1		(6)		(1)
Income from continuing operations		3,194		1,904		2,427
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization		826		794		785
Deferred income taxes		(789)		(77)		(147)
Non-cash lease cost		134		129		131
Provision for losses on accounts receivable and inventories		57		76		70
Share-based compensation expense		127		123		119
Impairment of held for sale businesses		—		74		14
Other		71		101		9
Changes in assets and liabilities, net of the effects of acquisitions and divestitures:
Accounts receivable, net		(134)		(146)		200
Inventories		(30)		(45)		(41)
Prepaid expenses and other current assets		25		17		50
Accounts payable		159		(1)		(396)
Accrued and other current liabilities		(165)		21		(398)
Income taxes		(83)		17		32
Other		85		145		(387)
Net cash provided by operating activities		3,477		3,132		2,468
Cash flows from investing activities:
Capital expenditures		(680)		(732)		(768)
Proceeds from sale of property, plant, and equipment		16		4		106
Acquisition of businesses, net of cash acquired		(339)		(110)		(220)
Proceeds from divestiture of businesses, net of cash retained by businesses sold		59		48		16
Other		(6)		22		(12)
Net cash used in investing activities		(950)		(768)		(878)
Cash flows from financing activities:
Net increase (decrease) in commercial paper		(75)		(40)		370
Proceeds from issuance of debt		348		499		588
Repayment of debt		(352)		(591)		(558)
Proceeds from exercise of share options		89		43		54
Repurchase of common shares		(2,062)		(945)		(1,412)
Payment of common share dividends to shareholders		(760)		(725)		(685)
Other		(57)		(34)		(41)
Net cash used in financing activities		(2,869)		(1,793)		(1,684)
Effect of currency translation on cash		—		2		(21)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(342)		573		(115)
Cash, cash equivalents, and restricted cash at beginning of fiscal year		1,661		1,088		1,203
Cash, cash equivalents, and restricted cash at end of fiscal year	$	1,319	$	1,661	$	1,088

Supplemental cash flow information:
Interest paid on debt, net	$	64	$	75	$	58
Income taxes paid, net of refunds		475		425		421

See Notes to Consolidated Financial Statements.

1. Basis of Presentation

The Consolidated Financial Statements reflect the consolidated operations of TE Connectivity Ltd. and its subsidiaries and have been prepared in United States (“U.S.”) dollars in accordance with accounting principles generally accepted in the U.S. (“GAAP”).

Description of the Business

TE Connectivity Ltd. (“TE Connectivity” or the “Company,” which may be referred to as “we,” “us,” or “our”) is a global industrial technology leader creating a safer, sustainable, productive, and connected future. Our broad range of connectivity and sensor solutions enable the distribution of power, signal, and data to advance next-generation transportation, renewable energy, automated factories, data centers, medical technology, and more.

We operated through three reportable segments during fiscal 2024:

	●	Transportation Solutions—The Transportation Solutions segment is a leader in connectivity and sensor technologies. Our products, which must withstand harsh conditions, are used in the automotive, commercial transportation, and sensors markets.

	●	Industrial Solutions—The Industrial Solutions segment is a leading supplier of products that connect and distribute power, data, and signals. Our products are used in the industrial equipment; aerospace, defense, and marine; energy; and medical markets.

	●	Communications Solutions—The Communications Solutions segment is a leading supplier of electronic components for the data and devices and the appliances markets.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

Fiscal Year

We have a 52- or 53-week fiscal year that ends on the last Friday of September. Fiscal 2024, 2023, and 2022 ended on September 27, 2024, September 29, 2023, and September 30, 2022, respectively. Fiscal 2024 and 2023 were each 52 weeks in length. Fiscal 2022 was 53 weeks in length. For fiscal years in which there are 53 weeks, the fourth fiscal quarter includes 14 weeks.

Change in Place of Incorporation

During fiscal 2024, our board of directors and shareholders approved a change in our jurisdiction of incorporation from Switzerland to Ireland. In connection with the change, we entered into a merger agreement with our wholly-owned subsidiary, TE Connectivity plc, a public limited company incorporated under Irish law. Under the merger agreement, we were merged with and into TE Connectivity plc, which was the surviving entity, in order to effect our change in jurisdiction of incorporation from Switzerland to Ireland. The merger and change in jurisdiction of incorporation were completed on September 30, 2024. See Note 21 for additional information regarding the change in place of incorporation.

2. Summary of Significant Accounting Policies

Principles of Consolidation

We consolidate entities in which we own or control more than 50% of the voting shares or otherwise control through similar rights. All intercompany transactions have been eliminated. The results of companies acquired or disposed of are included on the Consolidated Financial Statements from the effective date of acquisition or up to the date of disposal.

Revenue Recognition

We account for revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, which is a single, comprehensive, five-step revenue recognition model. Our revenues are generated principally from the sale of our products. Revenue is recognized as performance obligations under the terms of a contract, such as a purchase order with a customer, are satisfied; generally this occurs with the transfer of control. We transfer control and recognize revenue when we ship product to our customers, the customers accept and have legal title for the product, and we have a right to payment for such product. Revenue is measured as the amount of consideration that we expect to receive in exchange for those products and excludes taxes assessed by governmental authorities and collected from customers concurrent with the sale of products. Shipping and handling costs are treated as fulfillment costs and are included in cost of sales. Since we typically invoice our customers when we satisfy our performance obligations, we do not have material contract assets or contract liabilities. Our credit terms are customary and do not contain significant financing components that extend beyond one year of fulfillment of performance obligations. We apply the practical expedient of ASC 606 with respect to financing components and do not evaluate contracts in which payment is due within one year of satisfaction of the related performance obligation. Since our performance obligations to deliver products are part of contracts that generally have original durations of one year or less, we have elected to use the optional exemption to not disclose the aggregate amount of transaction prices associated with unsatisfied or partially satisfied performance obligations. See Note 20 for net sales disaggregated by industry end market and geographic region which is summarized by segment and that we consider meaningful to depict the nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors.

Our standard terms of sale generally warrant that our products will conform to our, or mutually agreed to, specifications and that our products will be free from material defects in materials and workmanship for a limited time. In certain instances, we may sell products to customers under terms other than our standard terms. We do not account for warranties as separate performance obligations. Amounts accrued for warranty claims were $34 million and $25 million at fiscal year end 2024 and 2023, respectively.

Although products are generally sold at fixed prices, certain distributors and customers receive incentives or awards, such as sales rebates, return allowances, scrap allowances, and other rights, which are accounted for as variable consideration. We estimate these amounts in the same period revenue is recognized based on the expected value to be provided to customers and reduce revenue accordingly. Our estimates of variable consideration and ultimate determination of the estimated amounts to include in the transaction price are based primarily on our assessment of anticipated performance and historical and forecasted information that is reasonably available to us.

Inventories

Inventories are recorded at the lower of cost or net realizable value using the first-in, first-out cost method.

Property, Plant, and Equipment, Net

Property, plant, and equipment is recorded at cost less accumulated depreciation. Maintenance and repair expenditures are charged to expense when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which are 10 to 20 years for land improvements, 5 to 40 years for buildings and improvements, and 1 to 15 years for machinery and equipment.

We periodically evaluate, when events and circumstances warrant, the net realizable value of property, plant, and equipment and other long-lived assets, relying on several factors including operating results, business plans, economic projections, and anticipated future cash flows. When indicators of potential impairment are present, the carrying values of the asset group are evaluated in relation to the operating performance and estimated future undiscounted cash flows of the underlying asset group. Impairment of the carrying value is recognized whenever anticipated future undiscounted cash flow estimates are less than the carrying value of the asset. Fair value estimates are based on assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk.

Goodwill and Other Intangible Assets

We account for goodwill and other intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other.

Intangible assets include both indeterminable-lived residual goodwill and determinable-lived identifiable intangible assets. Intangible assets with determinable lives primarily include intellectual property, consisting of patents, trademarks, and unpatented technology, and customer relationships. Recoverability estimates range from 1 to 50 years and costs are generally amortized on a straight-line basis. Evaluations of the remaining useful lives of determinable-lived intangible assets are performed on a periodic basis and when events and circumstances warrant.

At fiscal year end 2024, we had five reporting units, all of which contained goodwill. There were two reporting units in both the Transportation Solutions and Industrial Solutions segments and one reporting unit in the Communications Solutions segment. When changes occur in the composition of one or more reporting units, goodwill is reassigned to the reporting units affected based on their relative fair values.

Goodwill impairment is evaluated by comparing the carrying value of each reporting unit to its fair value on the first day of the fourth fiscal quarter of each year or more frequently if events or changes in circumstances indicate that the asset may be impaired. In assessing a potential impairment, management relies on several reporting unit-specific factors including operating results, business plans, economic projections, anticipated future cash flows, transactions, and marketplace data. There are inherent uncertainties related to these factors and management’s judgment in applying these factors to the impairment analysis.

When testing for goodwill impairment, we identify potential impairment by comparing the fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its fair value, a goodwill impairment charge will be recorded for the amount of the excess, limited to the total amount of goodwill allocated to the reporting unit.

Fair value estimates used in the goodwill impairment tests are calculated using an income approach based on the present value of future cash flows of each reporting unit. The income approach is supported by a guideline analysis (a market approach). These approaches incorporate several assumptions including future growth rates, discount rates, income tax rates, and market activity in assessing fair value and are reporting unit specific. Changes in economic and operating conditions impacting these assumptions could result in goodwill impairments in future periods.

Research and Development

Research and development expenditures are expensed when incurred and are included in research, development, and engineering expenses on the Consolidated Statements of Operations. Research and development expenses include salaries, direct costs incurred, and building and overhead expenses. The amounts expensed in fiscal 2024, 2023, and 2022 were $621 million, $593 million, and $610 million, respectively.

Income Taxes

Income taxes are computed in accordance with the provisions of ASC 740, Income Taxes. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been reflected on the Consolidated Financial Statements. Deferred tax liabilities and assets are determined based on the differences between the book and tax bases of particular assets and liabilities and operating loss carryforwards using tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The calculation of our tax liabilities includes estimates for uncertainties in the application of complex tax regulations across multiple global jurisdictions where we conduct our operations. Under the uncertain tax position provisions of ASC 740, we recognize liabilities for tax and related interest for issues in tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes and related interest will be due. These tax liabilities and related interest are reflected net of the impact of related tax loss carryforwards, as such tax loss carryforwards will be applied against these tax liabilities and will reduce the amount of cash tax payments due upon the eventual settlement with the tax authorities. These estimates may change due to changing facts and circumstances. Due to the complexity of these uncertainties, the ultimate resolution may result in a settlement that differs from our current estimate of the tax liabilities and related interest.

Financial Instruments

Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, debt, and derivative financial instruments.

We account for derivative financial instrument contracts on the Consolidated Balance Sheets at fair value. For instruments not designated as hedges under ASC 815, Derivatives and Hedging, the changes in the instruments’ fair value are recognized currently in earnings. For instruments designated as cash flow hedges, the effective portion of changes in the fair value of a derivative is recorded in other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the underlying hedged item affects earnings. Amounts excluded from the hedging relationship are recognized currently in earnings. Changes in the fair value of instruments designated as fair value hedges affect the carrying value of the asset or liability hedged, with changes in both the derivative instrument and the hedged asset or liability being recognized currently in earnings.

We determine the fair value of our financial instruments using methods and assumptions that are based on market conditions and risks existing at each balance sheet date. Standard market conventions are used to determine the fair value of financial instruments, including derivatives.

The cash flows related to derivative financial instruments are reported in the operating activities section of the Consolidated Statements of Cash Flows.

Our derivative financial instruments present certain market and counterparty risks. Concentration of counterparty risk is mitigated, however, by our use of financial institutions worldwide, substantially all of which have long-term S&P, Moody’s, and/or Fitch credit ratings of A/A2 or higher. In addition, we utilize only conventional derivative financial instruments. We are exposed to potential losses if a counterparty fails to perform according to the terms of its agreement. With respect to counterparty net asset positions recognized at fiscal year end 2024, we have assessed the likelihood of counterparty default as remote. We currently provide guarantees from a wholly-owned subsidiary to the counterparties to our commodity swap derivatives. The likelihood of performance on the guarantees has been assessed as remote. For all other derivative financial instruments, we are not required to provide, nor do we require counterparties to provide, collateral or other security.

Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, specifies a fair value hierarchy based upon the observable inputs utilized in valuation of certain assets and liabilities. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. Fair value measurements are classified under the following hierarchy:

	●	_Level 1—_Quoted prices in active markets for identical assets and liabilities.

	●	_Level 2—_Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

	●	_Level 3—_Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flows methodologies, and similar techniques that use significant unobservable inputs.

Derivative financial instruments measured at fair value on a recurring basis are generally valued using level 2 inputs.

Financial instruments other than derivative instruments include cash and cash equivalents, accounts receivable, accounts payable, and debt. These instruments are recorded on the Consolidated Balance Sheets at book value. For cash and cash equivalents, accounts receivable, and accounts payable, we believe book value approximates fair value due to the short-term nature of these instruments. See Note 10 for disclosure of the fair value of debt. The following is a description of the valuation methodologies used for the respective financial instruments:

	●	_Cash and cash equivalents—_Cash and cash equivalents are valued at book value, which we consider to be equivalent to unadjusted quoted prices (level 1).

	●	_Accounts receivable—_Accounts receivable are valued based on the net value expected to be realized. The net realizable value generally represents an observable contractual agreement (level 2).

	●	_Accounts payable—_Accounts payable are valued based on the net value expected to be paid, generally supported by an observable contractual agreement (level 2).

	●	_Debt—_The fair value of debt, including both current and non-current maturities, is derived from quoted market prices or other pricing determinations based on the results of market approach valuation models using observable market data such as recently reported trades, bid and offer information, and benchmark securities (level 2).

Pension Plans

The funded status of our defined benefit pension plans is recognized on the Consolidated Balance Sheets and is measured as the difference between the fair value of plan assets and the projected benefit obligation at the measurement date. The projected benefit obligation represents the actuarial present value of benefits projected to be paid upon retirement factoring in estimated future compensation levels. The fair value of plan assets represents the current market value of cumulative company and participant contributions made to irrevocable trust funds, held for the sole benefit of participants, which are invested by the trustees of the funds. The benefits under our defined benefit pension plans are based on various factors, such as years of service and compensation.

Net periodic pension benefit cost is based on the utilization of the projected unit credit method of calculation and is charged to earnings on a systematic basis over the expected average remaining service lives of current participants, or, for inactive plans, over the remaining life expectancy of participants.

The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions determined by our management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age, and years of service, as well as certain assumptions, including estimates of discount rates, expected returns on plan assets, rates of compensation increases, interest crediting rates, and mortality rates.

Share-Based Compensation

We determine the fair value of share awards on the date of grant. Share options are valued using the Black-Scholes-Merton valuation model; restricted share awards and performance awards are valued using our end-of-day share price on the date of grant. The fair value is expensed ratably over the expected service period, with an allowance made for estimated forfeitures based on historical employee activity. Estimates regarding the attainment of performance criteria are reviewed periodically; the cumulative impact of a change in estimate regarding the attainment of performance criteria is recorded in the period in which that change is made.

Earnings Per Share

Basic earnings per share is computed by dividing net income by the basic weighted-average number of common shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding adjusted for the potentially dilutive impact of share-based compensation arrangements.

Leases

We account for leases in accordance with of ASC 842, Leases. We have facility, land, vehicle, and equipment leases that expire at various dates. We determine if a contract qualifies as a lease at inception. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to control the use of an asset includes the right to obtain substantially all of the economic benefits of the identified asset and the right to direct the use of the identified asset.

Lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date of the lease based on the present value of remaining lease payments over the lease term. Lease ROU assets represent our right to use the underlying assets for the lease term and lease liabilities represent the obligation to make lease payments arising from the leases. We do not recognize ROU assets or lease liabilities that arise from short-term leases. Since our lease contracts do not contain a readily determinable implicit rate, we determine a fully-collateralized incremental borrowing rate that reflects a similar term to the lease and the economic environment of the applicable country or region in which the asset is leased.

We have elected to account for fixed lease and non-lease components in our real estate leases as a single lease component; other leases generally do not contain non-lease components. The non-lease components in our real estate leases include logistics services, warehousing, and other operational costs. Many of these costs are variable, fluctuating based on services provided, such as pallets shipped in and out of a location or square footage of space occupied. These costs, and any other variable rental costs, are excluded from our ROU assets and lease liabilities and are expensed as incurred. Some of our leases may include options to either renew or early terminate the lease. The exercise of these options is generally at our sole discretion and would only occur if there is an economic, financial, or business reason to do so. Such options are included in the lease term if we determine it is reasonably certain they will be exercised.

Currency Translation

For our non-U.S. dollar functional currency subsidiaries, assets and liabilities are translated into U.S. dollars using fiscal year end exchange rates. Sales and expenses are translated at average monthly exchange rates. Foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within equity. Gains and losses resulting from foreign currency transactions are included in earnings.

Restructuring Charges

Restructuring activities involve employee-related termination costs, facility exit costs, and asset impairments resulting from reductions-in-force, migration of facilities or product lines from higher-cost to lower-cost countries, or consolidation of facilities within countries. We recognize termination costs based on requirements established by severance policy, government law, or previous actions. Facility exit costs generally reflect the accelerated rent expense for ROU assets, expected lease termination costs, or costs that will continue to be incurred under the facility lease without future economic benefit to us. Restructuring activities often result in the disposal or abandonment of assets that require an acceleration of depreciation or impairment reflecting the excess of the assets’ carrying values over fair value.

The recognition of restructuring costs require that we make certain judgments and estimates regarding the nature, timing, and amount of costs associated with the planned exit activity. To the extent our actual results differ from our estimates and assumptions, we may be required to revise the estimated liabilities, requiring the recognition of additional restructuring costs or the reduction of liabilities already recognized. At the end of each reporting period, we evaluate the remaining accrued balances to ensure these balances are properly stated and the utilization of the reserves are for their intended purpose in accordance with developed exit plans.

Contingent Liabilities

We record a loss contingency when the available information indicates it is probable that we have incurred a liability and the amount of the loss is reasonably estimable. When a range of possible losses with equal likelihood exists, we record the low end of the range. The likelihood of a loss with respect to a particular contingency is often difficult to predict, and determining a meaningful estimate of the loss or a range of loss may not be practicable based on information available. In addition, it is not uncommon for such matters to be resolved over many years, during which time relevant developments and new information must continuously be evaluated to determine whether a loss is probable and a reasonable estimate of that loss can be made. When a loss is probable but a reasonable estimate cannot be made, or when a loss is at least reasonably possible, disclosure is provided.

Recently Issued Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, to improve disclosures about the nature of expenses in commonly presented financial statement captions. The amendments are effective for our fiscal 2028 Annual Report and subsequent interim periods; however, early adoption is permitted. The amendments can be applied either prospectively or retrospectively to all periods presented in the financial statements. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.

In March 2024, the U.S. Securities and Exchange Commission (“SEC”) issued its final climate disclosure rules, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which require all registrants to provide certain climate-related information in their registration statements and annual reports. The rules require disclosure of, among other things, material climate-related risks, activities to mitigate or adapt to such risks, governance and oversight of such risks, material climate targets and goals, and Scope 1 and/or Scope 2 greenhouse gas emissions, on a phased-in basis, when those emissions are material. In addition, the final rules require certain disclosures in the notes to the financial statements, including the effects of severe weather events and other natural conditions. The rules are effective for us on a phased-in timeline starting in fiscal 2026; however, in April 2024, the SEC issued an order to voluntarily stay its final climate rules pending the completion of judicial review thereof by the U.S. Court of Appeals for the Eighth Circuit. We are currently assessing the impact of the rules on our Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures through improvements to disclosures related primarily to the rate reconciliation and income taxes paid information. The amendments are effective for us in fiscal 2026; however, early adoption is permitted. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for our fiscal 2025 Annual Report and subsequent interim periods; however, early adoption is permitted. The amendments should be applied retrospectively to all periods presented in the financial statements. We are currently assessing the impact that adoption will have on our Consolidated Financial Statements.

Recently Adopted Accounting Pronouncement

In September 2022, the FASB issued ASU No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, to enhance transparency and introduce new disclosures related to an entity’s use of supplier finance programs in connection with the purchase of goods and services. The ASU requires us, as a buyer in a supplier finance program, to disclose the key terms of the program, the amount of obligations outstanding, the balance sheet presentation of such amounts, and a rollforward of the obligation activity during the annual period. We adopted this update in the first quarter of fiscal 2024. Adoption did not have a material impact on our Consolidated Financial Statements. See Note 12 for additional information regarding our supply chain finance program.

3. Restructuring and Other Charges, Net

Net restructuring and other charges consisted of the following:


	Fiscal
	2024		2023		2022

	(in millions)
Restructuring charges, net	$	144	$	260	$	137
(Gain) loss on divestitures and impairment of held for sale businesses, net		(10)		77		4
Costs related to change in place of incorporation		20		—		—
Other charges, net		12		3		—
Restructuring and other charges, net	$	166	$	340	$	141

Restructuring Charges, Net

Net restructuring and related charges by segment were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Transportation Solutions	$	62	$	145	$	80
Industrial Solutions		60		70		34
Communications Solutions		22		45		23
Restructuring charges, net		144		260		137
Plus: charges included in cost of sales(1)		—		—		16
Restructuring and related charges, net	$	144	$	260	$	153

	(1)	Charges included in cost of sales were attributable to inventory-related charges within the Industrial Solutions segment.

Activity in our restructuring reserves was as follows:


	Balance at												Balance at
	Beginning												End
	of Fiscal				Changes in		Cash		Non-Cash		Currency		of Fiscal
	Year		Charges		Estimate		Payments		Items		Translation		Year

	(in millions)
Fiscal 2024 Activity:
Fiscal 2024 Actions:
Employee severance	$	—	$	79	$	—	$	(9)	$	—	$	2	$	72
Property, plant, and equipment		—		7		—		—		(7)		—		—
Total		—		86		—		(9)		(7)		2		72
Fiscal 2023 Actions:
Employee severance		187		18		(16)		(79)		—		6		116
Facility and other exit costs		2		7		—		(9)		—		—		—
Property, plant, and equipment		—		13		—		—		(13)		—		—
Total		189		38		(16)		(88)		(13)		6		116
Fiscal 2022 Actions:
Employee severance		52		5		6		(53)		—		3		13
Facility and other exit costs		—		8		10		(10)		—		—		8
Property, plant, and equipment		—		(2)		(2)		—		4		—		—
Total		52		11		14		(63)		4		3		21
Pre-Fiscal 2022 Actions:
Employee severance		75		11		(10)		(21)		—		2		57
Facility and other exit costs		4		10		—		(7)		—		—		7
Total		79		21		(10)		(28)		—		2		64
Total fiscal 2024 activity	$	320	$	156	$	(12)	$	(188)	$	(16)	$	13	$	273
Fiscal 2023 Activity:
Fiscal 2023 Actions:
Employee severance	$	—	$	238	$	—	$	(50)	$	—	$	(1)	$	187
Facility and other exit costs		—		3		—		(1)		—		—		2
Property, plant, and equipment		—		6		—		—		(6)		—		—
Total		—		247		—		(51)		(6)		(1)		189
Fiscal 2022 Actions:
Employee severance		108		7		(7)		(61)		—		5		52
Facility and other exit costs		1		7		2		(10)		—		—		—
Property, plant, and equipment		—		3		—		—		(3)		—		—
Total		109		17		(5)		(71)		(3)		5		52
Pre-Fiscal 2022 Actions:
Employee severance		112		6		(1)		(49)		—		7		75
Facility and other exit costs		7		—		4		(7)		—		—		4
Property, plant, and equipment		—		—		(8)		—		8		—		—
Total		119		6		(5)		(56)		8		7		79
Total fiscal 2023 activity	$	228	$	270	$	(10)	$	(178)	$	(1)	$	11	$	320
Fiscal 2022 Activity:
Fiscal 2022 Actions:
Employee severance	$	—	$	126	$	—	$	(15)	$	—	$	(3)	$	108
Facility and other exit costs		—		2		—		(1)		—		—		1
Property, plant, and equipment and other non-cash charges		—		33		—		—		(33)		—		—
Total		—		161		—		(16)		(33)		(3)		109
Pre-Fiscal 2022 Actions:
Employee severance		287		2		(25)		(124)		—		(28)		112
Facility and other exit costs		17		13		(2)		(20)		—		(1)		7
Property, plant, and equipment		—		7		(3)		—		(4)		—		—
Total		304		22		(30)		(144)		(4)		(29)		119
Total fiscal 2022 activity	$	304	$	183	$	(30)	$	(160)	$	(37)	$	(32)	$	228

Fiscal 2024 Actions

During fiscal 2024, we initiated a restructuring program to optimize our manufacturing footprint and improve the cost structure of the organization, primarily in the Industrial Solutions and Transportation Solutions segments. In connection with this program, we recorded restructuring charges of $86 million during fiscal 2024. We expect to complete all restructuring actions commenced during fiscal 2024 by the end of fiscal 2025 and anticipate that additional charges related to fiscal 2024 actions will be insignificant.

Fiscal 2023 Actions

During fiscal 2023, we initiated a restructuring program associated with cost structure improvements across all segments. In connection with this program, during fiscal 2024 and 2023, we recorded net restructuring charges of $22 million and $247 million, respectively. We expect additional charges related to fiscal 2023 actions will be insignificant.

The following table summarizes cumulative charges incurred for the fiscal 2023 program by segment as of fiscal year end 2024:


	Cumulative
	Charges
	Incurred
	(in millions)
Transportation Solutions	$	142
Industrial Solutions		92
Communications Solutions		35
Total	$	269

Fiscal 2022 Actions

During fiscal 2022, we initiated a restructuring program associated with footprint consolidation and cost structure improvements across all segments. In connection with this program, during fiscal 2024, 2023, and 2022, we recorded net restructuring charges of $25 million, net restructuring charges of $12 million, and restructuring and related charges of $161 million, respectively. We expect that any additional charges related to fiscal 2022 actions will be insignificant.

The following table summarizes cumulative charges incurred for the fiscal 2022 program by segment as of fiscal year end 2024:


	Cumulative
	Charges
	Incurred
	(in millions)
Transportation Solutions	$	119
Industrial Solutions		51
Communications Solutions		28
Total	$	198

Pre-Fiscal 2022 Actions

During fiscal 2024, 2023, and 2022, we recorded net restructuring charges of $11 million, charges of $1 million, and credits of $8 million, respectively, related to pre-fiscal 2022 actions. We expect that any additional charges related to restructuring actions commenced prior to fiscal 2022 will be insignificant.

Total Restructuring Reserves

Restructuring reserves included on the Consolidated Balance Sheets were as follows:


	Fiscal Year End
	2024		2023

	(in millions)
Accrued and other current liabilities	$	233	$	240
Other liabilities		40		80
Restructuring reserves	$	273	$	320

Divestitures

During fiscal 2024, we sold one business for net cash proceeds of $59 million. In connection with the divestiture, we recorded a pre-tax gain on sale of $10 million. Additionally, during fiscal 2023, we recorded a pre-tax impairment charge of $68 million when the business was reclassified to held for sale. The business sold was reported in our Transportation Solutions segment.

We sold three businesses for net cash proceeds of $48 million during fiscal 2023. In connection with the divestitures, we recorded pre-tax impairment charges and a net pre-tax loss on sales, which totaled to a net charge of $9 million. Additionally, during fiscal 2022, we recorded pre-tax impairment charges of $14 million when the businesses were reclassified to held for sale. The businesses sold were reported in our Industrial Solutions segment.

During fiscal 2022, we sold two businesses for net cash proceeds of $16 million and recognized a net pre-tax gain on sales of $10 million. The businesses sold were reported in our Transportation Solutions and Industrial Solutions segments.

Change in Place of Incorporation

During fiscal 2024, we incurred costs of $20 million related to our change in place of incorporation from Switzerland to Ireland. See Notes 1 and 21 for additional information regarding the change.

4. Acquisitions

During the quarter ended December 29, 2023, we acquired approximately 98.7% of the outstanding shares of Schaffner Holding AG (“Schaffner”), a leader in electromagnetic solutions based in Switzerland, for CHF 505.00 per share in cash for a purchase price of CHF 294 million (equivalent to $339 million), net of cash acquired. As a result of the transaction, we recognized a noncontrolling interest with a fair value of $5 million as of the acquisition date. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition. Our valuation of identifiable intangible assets, assets acquired, and liabilities assumed is currently in process; therefore, the current allocation is subject to adjustment upon finalization of the valuations. The amount of these potential adjustments could be significant. During the quarter ended June 28, 2024, we completed a squeeze-out of the remaining minority shareholders for $5 million and the Schaffner shares were delisted from the SIX Swiss Exchange.

We acquired one business for a cash purchase price of $110 million, net of cash acquired, during fiscal 2023. The acquired business has been reported as part of our Industrial Solutions segment from the date of acquisition.

We acquired three businesses for a combined cash purchase price of $245 million, net of cash acquired, during fiscal 2022. The acquired businesses have been reported as part of our Communications Solutions segment from the date of acquisition. During fiscal 2022, we finalized the purchase price allocation of certain fiscal 2021 acquisitions, which included the recognition of $25 million of cash acquired, and the associated goodwill was reduced.

5. Inventories

Inventories consisted of the following:


	Fiscal Year End
	2024		2023

	(in millions)
Raw materials	$	328	$	367
Work in progress		1,063		1,185
Finished goods		1,126		1,000
Inventories	$	2,517	$	2,552

6. Property, Plant, and Equipment, Net

Net property, plant, and equipment consisted of the following:


	Fiscal Year End
	2024		2023

	(in millions)
Property, plant, and equipment, gross:
Land and improvements	$	120	$	116
Buildings and improvements		1,571		1,438
Machinery and equipment		8,931		8,311
Construction in process		659		625
		11,281		10,490
Accumulated depreciation		(7,378)		(6,736)
Property, plant, and equipment, net	$	3,903	$	3,754

Depreciation expense was $660 million, $607 million, and $593 million in fiscal 2024, 2023, and 2022, respectively.

7. Goodwill

The changes in the carrying amount of goodwill by segment were as follows:


	Transportation		Industrial		Communications
	Solutions		Solutions		Solutions		Total

	(in millions)
Balance at fiscal year end 2022(1)	$	1,439	$	3,118	$	701	$	5,258
Acquisition		—		75		—		75
Currency translation and other		39		70		21		130
Balance at fiscal year end 2023(1)		1,478		3,263		722		5,463
Acquisition		—		180		—		180
Currency translation and other		41		95		22		158
Balance at fiscal year end 2024(1)	$	1,519	$	3,538	$	744	$	5,801

(1)	At fiscal year end 2024, 2023, and 2022, accumulated impairment losses for the Transportation Solutions, Industrial Solutions, and Communications Solutions segments were $3,091 million, $669 million, and $489 million, respectively.

During fiscal 2024 and 2023, we recognized goodwill of $180 million and $75 million, respectively, in the Industrial Solutions segment connection with new acquisitions. See Note 4 for additional information regarding acquisitions.

We completed our annual goodwill impairment test in the fourth quarter of fiscal 2024 and determined that no impairment existed.

8. Intangible Assets, Net

Intangible assets consisted of the following:


	2024						2023
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Amount		Amortization		Amount		Amount		Amortization		Amount

	(in millions)
Customer relationships	$	1,901	$	(948)	$	953	$	1,720	$	(806)	$	914
Intellectual property		686		(481)		205		1,186		(938)		248
Other		23		(7)		16		19		(6)		13
Total	$	2,610	$	(1,436)	$	1,174	$	2,925	$	(1,750)	$	1,175

Intangible asset amortization expense was $166 million, $187 million, and $192 million for fiscal 2024, 2023, and 2022, respectively. At fiscal year end 2024, the aggregate amortization expense on intangible assets is expected to be as follows:


	(in millions)
Fiscal 2025	$	164
Fiscal 2026		157
Fiscal 2027		138
Fiscal 2028		103
Fiscal 2029		96
Thereafter		516
Total	$	1,174

9. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following:


	Fiscal Year End
	2024		2023

	(in millions)
Accrued payroll and employee benefits	$	657	$	577
Dividends payable to shareholders		390		368
Restructuring reserves		233		240
Income taxes payable		113		140
Lease liability		128		118
Deferred revenue		58		74
Share repurchase program payable		—		71
Interest payable		27		28
Other		541		602
Accrued and other current liabilities	$	2,147	$	2,218

10. Debt

Debt was as follows:


	Fiscal Year End
	2024		2023

	(in millions)
Principal debt:
Commercial paper, at a weighted-average interest rate of 4.95% and 5.50%, respectively	$	255	$	330
3.45% senior notes due 2024		—		350
0.00% euro-denominated senior notes due 2025		615		582
4.50% senior notes due 2026		500		500
3.70% senior notes due 2026		350		350
3.125% senior notes due 2027		400		400
0.00% euro-denominated senior notes due 2029		615		582
4.625% senior notes due 2030		350		—
2.50% senior notes due in 2032		600		600
7.125% senior notes due 2037		477		477
Other		76		75
		4,238		4,246
Unamortized discounts, premiums, and debt issuance costs, net		(35)		(35)
Total debt	$	4,203	$	4,211

During fiscal 2024, Tyco Electronics Group S.A. (“TEGSA”), our wholly-owned subsidiary, issued $350 million aggregate principal amount of 4.625% senior notes due in February 2030. The notes are TEGSA’s unsecured senior obligations and rank equally in right of payment with all existing and any future senior indebtedness of TEGSA and senior to any subordinated indebtedness that TEGSA may incur.

TEGSA entered into a new five-year unsecured senior revolving credit facility (“Credit Facility”) in April 2024 with aggregate commitments of $1.5 billion, which refinanced and replaced in full TEGSA’s existing $1.5 billion five-year unsecured senior revolving credit facility (the “Replaced Credit Facility”). The Credit Facility matures in April 2029. TEGSA had no borrowings under the Credit Facility at fiscal year end 2024 or the Replaced Credit Facility at fiscal year end 2023.

Borrowings under the Credit Facility bear interest at a rate per annum equal to, at the option of TEGSA, (1) with respect to revolving loans denominated in U.S. dollars, (a) the term secured overnight financing rate (“Term SOFR”) (as defined in the Credit Facility) or (b) an alternate base rate equal to the highest of (i) Bank of America, N.A.’s base rate, (ii) the federal funds effective rate plus 1/2 of 1%, (iii) the Term SOFR for a one-month interest period plus 1%, and (iv) 1%, and (2) with respect to revolving loans determined in an alternative currency, (a) an alternative currency daily rate or (b) an alternative currency term rate, as applicable, plus, in each case, an applicable margin based upon the senior, unsecured, long-term debt rating of TEGSA. TEGSA is required to pay an annual facility fee. Based on the applicable credit ratings of TEGSA, this fee ranges from 5.0 to 12.5 basis points of the lenders’ commitments under the Credit Facility.

The Credit Facility contains a financial ratio covenant providing that if, as of the last day of each fiscal quarter, our ratio of Consolidated Total Debt to Consolidated EBITDA (as defined in the Credit Facility) for the then most recently concluded period of four consecutive fiscal quarters exceeds 3.75 to 1.0, an Event of Default (as defined in the Credit Facility) is triggered. The Credit Facility and our other debt agreements contain other customary covenants.

Periodically, TEGSA issues commercial paper to U.S. institutional accredited investors and qualified institutional buyers in accordance with available exemptions from the registration requirements of the Securities Act of 1933 as part of our ongoing effort to maintain financial flexibility and to potentially decrease the cost of borrowings. Borrowings under the commercial paper program are backed by the Credit Facility.

During fiscal 2024, TEGSA’s payment obligations under its senior notes, commercial paper, and Credit Facility were fully and unconditionally guaranteed on an unsecured basis by its then parent, TE Connectivity Ltd., and, as of September 24, 2024, also by TE Connectivity Ltd.’s wholly-owned subsidiary, TE Connectivity Switzerland Ltd. As a result

of our change in place of incorporation, such guarantees are provided by TE Connectivity plc and its wholly-owned subsidiary, TE Connectivity Switzerland Ltd., in fiscal 2025.

At fiscal year end 2024, principal payments required for debt are as follows:


	(in millions)
Fiscal 2025	$	872
Fiscal 2026		852
Fiscal 2027		402
Fiscal 2028		—
Fiscal 2029		615
Thereafter		1,497
Total	$	4,238

The fair value of our debt, based on indicative valuations, was approximately $4,190 million and $3,974 million at fiscal year end 2024 and 2023, respectively.

11. Leases

The components of lease cost were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Operating lease cost	$	134	$	129	$	131
Variable lease cost		53		55		52
Total lease cost	$	187	$	184	$	183

Amounts recognized on the Consolidated Balance Sheets were as follows:


	Fiscal Year End
	2024			2023

	($ in millions)
Operating lease ROU assets:
Other assets	$	433		$	390
Operating lease liabilities:
Accrued and other current liabilities	$	128		$	118
Other liabilities		313			280
Total operating lease liabilities	$	441		$	398

Weighted-average remaining lease term (in years)		5.5			5.0
Weighted-average discount rate		3.4	%		3.0	%

Cash flow information, including significant non-cash transactions, related to leases was as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Cash paid for amounts included in the measurement of lease liabilities:
Payments for operating leases(1)	$	141	$	127	$	122

ROU assets, including modifications of existing leases, obtained in exchange for operating lease liabilities		180		106		135

(1)	These payments are included in cash flows from operating activities, primarily in changes in accrued and other current liabilities.

At fiscal year end 2024, the maturities of operating lease liabilities were as follows:


	(in millions)
Fiscal 2025	$	128
Fiscal 2026		103
Fiscal 2027		72
Fiscal 2028		53
Fiscal 2029		36
Thereafter		94
Total lease payments		486
Less: interest		(45)
Present value of lease liabilities	$	441

12. Commitments and Contingencies

Legal Proceedings

In the normal course of business, we are subject to various legal proceedings and claims, including patent infringement claims, product liability matters, employment disputes, disputes on agreements, other commercial disputes, environmental matters, antitrust claims, and tax matters, including non-income tax matters such as value added tax, sales and use tax, real estate tax, and transfer tax. Although it is not feasible to predict the outcome of these proceedings, based upon our experience, current information, and applicable law, we do not expect that the outcome of these proceedings, either individually or in the aggregate, will have a material effect on our results of operations, financial position, or cash flows.

Trade Compliance Matters

We have been investigating our past compliance with relevant U.S. trade controls and have made voluntary disclosures of apparent trade controls violations to the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”). We have also been contacted by the U.S. Department of Justice concerning certain aspects of the BIS matters. During the quarter ended September 27, 2024, we concluded our open matters with BIS, with our settlement including the payment of a penalty of approximately $6 million. We are cooperating with the DDTC in its ongoing investigation. We are unable to predict the timing and final outcome of the agency’s investigation. An unfavorable outcome may include fines or penalties imposed in response to our disclosures, but we are not yet able to reasonably estimate the extent of any such fines or penalties. Although we have reserved for potential fines and penalties relating to these matters based on our current understanding of the facts, the investigation into these matters has yet to be completed and the final outcome of such investigation and related fines and penalties may differ from amounts currently reserved.

Environmental Matters

We are involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites. The ultimate cost of site cleanup is difficult to predict given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations, and alternative cleanup methods. As of fiscal year end 2024, we concluded that we would incur investigation and remediation costs at these sites in the reasonably possible range of $17 million to $43 million, and we accrued $21 million as the probable loss, which was the best estimate within this range. We believe that any potential payment of such estimated amounts will not have a material adverse effect on our results of operations, financial position, or cash flows.

Guarantees

In disposing of assets or businesses, we often provide representations, warranties, and/or indemnities to cover various risks including unknown damage to assets, environmental risks involved in the sale of real estate, liability for investigation and remediation of environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. We do not expect that these uncertainties will have a material adverse effect on our results of operations, financial position, or cash flows.

At fiscal year end 2024, we had outstanding letters of credit, letters of guarantee, and surety bonds of $186 million, including letters of credit of $22 million associated with our divestiture of the Subsea Communications business. In addition, at fiscal year end 2024, we had $23 million of performance guarantees associated with the divestiture. We contractually agreed to continue to honor letters of credit and performance guarantees related to the business’ projects that existed as of the date of sale; however, based on historical experience, we do not anticipate having to perform on these guarantees.

Supply Chain Finance Program

We have an agreement with a financial institution that allows participating suppliers the ability to finance payment obligations. The financial institution has separate arrangements with the suppliers and provides them with the option to request early payment for invoices. We do not determine the terms or conditions of the arrangement between the financial institution and suppliers. Our obligation to suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’ decisions to finance amounts under the arrangement and we are not required to post collateral with the financial institution. The outstanding payment obligations under our supply chain finance program, which are included in accounts payable on our Consolidated Balance Sheets, were $105 million and $109 million at fiscal year end 2024 and 2023, respectively.

13. Financial Instruments and Fair Value Measurements

We use derivative and non-derivative financial instruments to manage certain exposures to foreign currency, interest rate, investment, and commodity risks.

Foreign Currency Exchange Rate Risk

As part of managing the exposure to changes in foreign currency exchange rates, we utilize cross-currency swap contracts and foreign currency forward contracts, a portion of which are designated as cash flow hedges. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in foreign currency exchange rates on intercompany and other cash transactions. We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with the cash flow hedge-designated instruments addressing foreign exchange risks will be reclassified into the Consolidated Statement of Operations within the next twelve months.

During fiscal 2015, we entered into cross-currency swap contracts, which were designated as cash flow hedges, to reduce our exposure to foreign currency exchange rate risk associated with certain intercompany loans. As of fiscal year end 2022, all such cross-currency swap contracts had been terminated or matured and were settled; additionally, all related collateral positions were settled. During fiscal 2024 and 2023, we did not enter into any cross-currency swap contracts and there were no amounts outstanding.

The impacts of our cross-currency swap contracts were as follows:


	Fiscal
	2022
	(in millions)
Losses recorded in other comprehensive income (loss)	$	(7)
Gains excluded from the hedging relationship(1)		70
Gains reclassified from other comprehensive income (loss) into selling, general, and administrative expenses		2

(1)	Gains excluded from the hedging relationship are recognized prospectively in selling, general, and administrative expenses and are offset by losses generated as a result of re-measuring certain intercompany loans to the U.S. dollar.

Hedge of Net Investment

We hedge our net investment in certain foreign operations using intercompany loans and external borrowings denominated in the same currencies. The aggregate notional value of these hedges was $2,417 million and $1,709 million at fiscal year end 2024 and 2023, respectively.

We also use a cross-currency swap program to hedge our net investment in certain foreign operations. The aggregate notional value of the contracts under this program was $5,367 million and $3,806 million at fiscal year end 2024 and 2023, respectively. Under the terms of these contracts, we receive interest in U.S. dollars at a weighted-average rate of 1.7% per annum and pay no interest. Upon the maturity of these contracts at various dates through fiscal 2028, we will pay the notional value of the contracts in the designated foreign currency and receive U.S. dollars from our counterparties. We are not required to provide collateral for these contracts.

These cross-currency swap contracts were recorded on the Consolidated Balance Sheets as follows:


	Fiscal Year End
	2024		2023

	(in millions)
Prepaid expenses and other current assets	$	31	$	109
Other assets		11		79
Accrued and other current liabilities		51		4
Other liabilities		99		10

The impacts of our hedge of net investment programs were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Foreign currency exchange gains (losses) on intercompany loans and external borrowings(1)	$	(112)	$	(162)	$	516
Gains (losses) on cross-currency swap contracts designated as hedges of net investment(1)		(194)		(29)		265

(1)	Recorded as currency translation, a component of accumulated other comprehensive income (loss), and offset by changes attributable to the translation of the net investment.

Interest Rate and Investment Risk Management

We issue debt, as needed, to fund our operations and capital requirements. Such borrowings can result in interest rate exposure. To manage the interest rate exposure, we use interest rate swap contracts to convert a portion of fixed rate debt into variable rate debt. We may utilize forward starting interest rate swap contracts to manage interest rate exposure in periods prior to the anticipated issuance of fixed rate debt. During fiscal 2022, we terminated forward starting interest rate swap contracts as a result of the issuance of our 2.50% senior notes due in 2032. During fiscal 2024 and 2023, we did not enter into any forward starting interest rate swap contracts and there were no amounts outstanding.

The impacts of our forward starting interest rate swap contracts were as follows:


	Fiscal
	2022
	(in millions)
Gains recorded in other comprehensive income (loss)	$	13

We also utilize investment swap contracts to manage earnings exposure on certain nonqualified deferred compensation liabilities.

Commodity Hedges

As part of managing the exposure to certain commodity price fluctuations, we utilize commodity swap contracts. The objective of these contracts is to minimize impacts to cash flows and profitability due to changes in prices of commodities used in production. These contracts had an aggregate notional value of $488 million and $459 million at fiscal

year end 2024 and 2023, respectively, and were designated as cash flow hedges. These commodity swap contracts were recorded on the Consolidated Balance Sheets as follows:


	Fiscal Year End
	2024		2023

	(in millions)
Prepaid expenses and other current assets	$	52	$	3
Other assets		4		—
Accrued and other current liabilities		1		21
Other liabilities		—		5

The impacts of our commodity swap contracts were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Gains (losses) recorded in other comprehensive income (loss)	$	102	$	31	$	(86)
Gains (losses) reclassified from accumulated other comprehensive income (loss) into cost of sales		19		(39)		22

We expect that significantly all of the balance in accumulated other comprehensive income (loss) associated with commodity hedges will be reclassified into the Consolidated Statement of Operations within the next twelve months.

Fair Value Measurements

Financial instruments recorded at fair value on a recurring basis, which consist of marketable securities and derivative instruments not discussed above, were immaterial at fiscal year end 2024 and 2023.

14. Retirement Plans

Defined Benefit Pension Plans

We have several contributory and noncontributory defined benefit retirement plans covering certain of our non-U.S. and U.S. employees, designed in accordance with local customs and practice.

The net periodic pension benefit cost (credit) for all non-U.S. and U.S. defined benefit pension plans was as follows:


	Non-U.S. Plans									U.S. Plans
	Fiscal									Fiscal
	2024			2023			2022			2024			2023			2022

	($ in millions)
Operating expense:
Service cost	$	28		$	29		$	38		$	7		$	9		$	8
Other (income) expense:
Interest cost		63			60			32			39			38			26
Expected returns on plan assets		(53)			(48)			(55)			(38)			(38)			(47)
Amortization of net actuarial loss		5			6			24			4			4			3
Amortization of prior service credit		(4)			(4)			(5)			—			—			—
Settlement and curtailment gains and other		(1)			(2)			(3)			—			—			—
Net periodic pension benefit cost (credit)	$	38		$	41		$	31		$	12		$	13		$	(10)
Weighted-average assumptions used to determine net pension benefit cost (credit) during the fiscal year:
Discount rate		4.13	%		3.80	%		1.37	%		6.04	%		5.53	%		2.84	%
Expected returns on plan assets		5.08	%		4.61	%		3.77	%		7.10	%		6.60	%		5.90	%
Rates of compensation increases		2.68	%		2.62	%		2.53	%		—	%		—	%		—	%

The following table represents the changes in benefit obligation and plan assets and the net amount recognized on the Consolidated Balance Sheets for all non-U.S. and U.S. defined benefit pension plans:


	Non-U.S. Plans						U.S. Plans
	Fiscal						Fiscal
	2024			2023			2024			2023

	($ in millions)
Change in benefit obligation:
Benefit obligation at beginning of fiscal year	$	1,509		$	1,502		$	674		$	717
Service cost		28			29			7			9
Interest cost		63			60			39			38
Actuarial (gains) losses		112			(79)			57			(23)
Benefits and administrative expenses paid		(75)			(73)			(77)			(67)
Settlements and curtailments		(15)			(38)			—			—
Currency translation		106			105			—			—
Other		50			3			—			—
Benefit obligation at end of fiscal year		1,778			1,509			700			674

Change in plan assets:
Fair value of plan assets at beginning of fiscal year		1,007			989			566			612
Actual returns on plan assets		124			(3)			94			20
Employer contributions		45			70			24			1
Benefits and administrative expenses paid		(75)			(73)			(77)			(67)
Settlements		(15)			(35)			—			—
Currency translation		82			54			—			—
Other		49			5			—			—
Fair value of plan assets at end of fiscal year		1,217			1,007			607			566
Funded status	$	(561)		$	(502)		$	(93)		$	(108)

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	182		$	143		$	—		$	—
Accrued and other current liabilities		(34)			(30)			(2)			(4)
Long-term pension and postretirement liabilities		(709)			(615)			(91)			(104)
Net amount recognized	$	(561)		$	(502)		$	(93)		$	(108)

Pre-tax amounts included in accumulated other comprehensive income (loss) which have not yet been recognized in net periodic pension benefit cost:
Net actuarial loss	$	(204)		$	(154)		$	(137)		$	(140)
Prior service credit		5			9			—			—
Total	$	(199)		$	(145)		$	(137)		$	(140)

Weighted-average assumptions used to determine pension benefit obligation at fiscal year end:
Discount rate		3.59	%		4.13	%		4.94	%		6.04	%
Rates of compensation increases		2.59	%		2.68	%		—	%		—	%

The pre-tax amounts recognized in accumulated other comprehensive income (loss) for all non-U.S. and U.S. defined benefit pension plans were as follows:


	Non-U.S. Plans				U.S. Plans
	Fiscal				Fiscal
	2024		2023		2024		2023

	(in millions)
Current year net actuarial gain (loss) recorded in accumulated other comprehensive income (loss)	$	(55)	$	16	$	(1)	$	5
Amortization of net actuarial loss		5		6		4		4
Current year prior service credit (cost) recorded in accumulated other comprehensive income (loss)		—		(1)		—		1
Amortization of prior service credit		(4)		(6)		—		—
	$	(54)	$	15	$	3	$	10

In fiscal 2024, unrecognized actuarial losses recorded in accumulated other comprehensive income (loss) were primarily the result of lower discount rates, partially offset by favorable asset performance for our non-U.S. defined benefit pension plans as compared to fiscal 2023.

In determining the expected returns on plan assets, we consider the relative weighting of plan assets by class and individual asset class performance expectations.

The investment strategies for non-U.S. and U.S. pension plans are governed locally. Our investment strategy for our pension plans is to manage the plans on a going concern basis. Current investment policy is to achieve a reasonable return on assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants. Projected returns are based primarily on pro forma asset allocation, expected long-term returns, and forward-looking estimates of active portfolio and investment management.

At fiscal year end 2024, the long-term target asset allocation in our U.S. plans’ master trust is 25% return-seeking assets and 75% liability-hedging assets. Return-seeking assets, including non-U.S. and U.S. equity securities, are assets intended to generate returns in excess of pension liability growth. Liability-hedging assets, including government and corporate bonds, are assets intended to have characteristics similar to pension liabilities and are used to better match asset cash flows with expected obligation cash flows. Asset re-allocation to meet that target is occurring over a multi-year period based on the funded status. We expect to reach our target allocation when the funded status of the plans exceeds 110%. Based on the funded status of the plans as of fiscal year end 2024, our target asset allocation is 67% return-seeking and 33% liability-hedging.

Target weighted-average asset allocation and weighted-average asset allocation for non-U.S. and U.S. pension plans were as follows:


	Non-U.S. Plans						U.S. Plans
			Fiscal		Fiscal				Fiscal		Fiscal
			Year End		Year End				Year End		Year End
	Target		2024		2023		Target		2024		2023
Asset category:
Equity securities	33	%	40	%	38	%	67	%	54	%	50	%
Fixed income	36		36		36		33		46		50
Other	31		24		26		—		—		—
Total	100	%	100	%	100	%	100	%	100	%	100	%

Our common shares are not a direct investment of our pension funds; however, the pension funds may indirectly include our shares. The aggregate amount of our common shares would not be considered material relative to the total pension fund assets.

Our funding policy is to make contributions in accordance with the laws and customs of the various countries in which we operate as well as to make discretionary voluntary contributions from time to time. We expect to make the

minimum required contributions of approximately $50 million and $20 million to our non-U.S. and U.S. pension plans, respectively, in fiscal 2025. We may also make voluntary contributions at our discretion.

At fiscal year end 2024, benefit payments, which reflect future expected service, as appropriate, are expected to be paid as follows:


	Non-U.S. Plans		U.S. Plans

	(in millions)
Fiscal 2025	$	98	$	61
Fiscal 2026		98		61
Fiscal 2027		96		60
Fiscal 2028		102		59
Fiscal 2029		105		58
Fiscal 2030-2034		572		268

Presented below is the accumulated benefit obligation for all non-U.S. and U.S. pension plans as well as additional information related to plans with an accumulated benefit obligation in excess of plan assets and plans with a projected benefit obligation in excess of plan assets.


	Non-U.S. Plans				U.S. Plans
	Fiscal Year End				Fiscal Year End
	2024		2023		2024		2023

	(in millions)
Accumulated benefit obligation	$	1,700	$	1,446	$	700	$	674
Pension plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligation		743		643		700		674
Fair value of plan assets		50		42		607		566
Pension plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation		856		742		700		674
Fair value of plan assets		113		91		607		566

We value our pension assets based on the fair value hierarchy of ASC 820, Fair Value Measurements and Disclosures. Details of the fair value hierarchy are described in Note 2. The following table presents our defined benefit pension plans’ asset categories and their associated fair value within the fair value hierarchy:


	Fiscal Year End 2024
	Non-U.S. Plans								U.S. Plans
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

	(in millions)
Equity:
Commingled equity funds(1)	$	—	$	205	$	—	$	205	$	—	$	184	$	—	$	184
Fixed income:
Commingled fixed income funds(2)		—		711		—		711		—		275		—		275
Other(3)		—		181		—		181		—		2		—		2
Subtotal	$	—	$	1,097	$	—		1,097	$	—	$	461	$	—		461
Items to reconcile to fair value of plan assets(4)								120								146
Fair value of plan assets							$	1,217							$	607


	Fiscal Year End 2023
	Non-U.S. Plans								U.S. Plans
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

	(in millions)
Equity:
Commingled equity funds(1)	$	—	$	185	$	—	$	185	$	—	$	153	$	—	$	153
Fixed income:
Commingled fixed income funds(2)		—		559		—		559		—		252		—		252
Other(3)		—		167		—		167		—		14		—		14
Subtotal	$	—	$	911	$	—		911	$	—	$	419	$	—		419
Items to reconcile to fair value of plan assets(4)								96								147
Fair value of plan assets							$	1,007							$	566

(1)	Commingled equity funds are pooled investments in multiple equity-type securities. Fair value is calculated as the closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.

(2)	Commingled fixed income funds are pooled investments in multiple fixed income-type securities. Fair value is calculated as the closing price of the underlying investments, an observable market condition, divided by the number of shares of the fund outstanding.

(3)

Other investments are composed of insurance contracts, derivatives, short-term investments, and structured products such as collateralized obligations and mortgage- and asset-backed securities. Insurance contracts are valued using cash surrender value, or face value of the contract if a cash surrender value is unavailable (level 2), as these values represent the amount that the plan would receive on termination of the underlying contract. Derivatives, short-term investments, and structured products are marked to fair value using models that are supported by observable market-based data (level 2).

(4)	Items to reconcile to fair value of plan assets include certain investments containing no significant redemption restrictions that were measured at net asset value (“NAV”) using the NAV practical expedient available in ASC 820 and amounts receivable or payable for unsettled transactions and cash balances, both of which are considered to be carried at book value.

Defined Contribution Retirement Plans

We maintain several defined contribution retirement plans, the most significant of which is located in the U.S. These plans include 401(k) matching programs, as well as qualified and nonqualified profit sharing and share bonus retirement plans. Expense for the defined contribution plans is computed as a percentage of participants’ compensation and was $57 million, $56 million, and $59 million for fiscal 2024, 2023, and 2022, respectively.

Deferred Compensation Plans

We maintain nonqualified deferred compensation plans, which permit eligible employees to defer a portion of their compensation. A record-keeping account is set up for each participant and the participant chooses from a variety of measurement funds for the deemed investment of their accounts. The measurement funds correspond to several funds in our 401(k) plans and the account balance fluctuates with the investment returns on those funds. At fiscal year end 2024 and 2023, total deferred compensation liabilities were $285 million and $236 million, respectively, and were recorded in other liabilities on the Consolidated Balance Sheets. See Note 13 for additional information regarding our risk management strategy related to deferred compensation liabilities.

Postretirement Benefit Plans

In addition to providing pension and 401(k) benefits, we also provide certain health care coverage continuation for qualifying retirees from the date of retirement to age 65 or lifetime, as applicable. The accumulated postretirement benefit obligation was $11 million at both fiscal year end 2024 and 2023, and the underfunded status of the postretirement benefit plans was included primarily in long-term pension and postretirement liabilities on the Consolidated Balance Sheets. Activity during fiscal 2024, 2023, and 2022 was not significant.

15. Income Taxes

Income Tax Expense (Benefit)

Significant components of the income tax expense (benefit) were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Current income tax expense (benefit):
U.S. Federal	$	23	$	23	$	20
U.S. State		4		—		(19)
Non-U.S.		365		418		452
		392		441		453
Deferred income tax expense (benefit):
U.S. Federal		(49)		(90)		(90)
U.S. State		3		(6)		—
Non-U.S.		(743)		19		(57)
		(789)		(77)		(147)
Income tax expense (benefit)	$	(397)	$	364	$	306

The U.S. and non-U.S. components of income from continuing operations before income taxes were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
U.S.	$	(96)	$	(137)	$	(4)
Non-U.S.		2,893		2,405		2,737
Income from continuing operations before income taxes	$	2,797	$	2,268	$	2,733

The reconciliation between U.S. federal income taxes at the statutory rate and income tax expense (benefit) was as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Notional U.S. federal income tax expense at the statutory rate(1)	$	587	$	476	$	574
Adjustments to reconcile to the income tax expense (benefit):
U.S. state income tax expense (benefit), net		6		(5)		(15)
Tax law changes		(260)		(1)		21
Tax credits		(982)		(13)		(13)
Non-U.S. net earnings(2)		(15)		(58)		(105)
Change in accrued income tax liabilities		160		47		(14)
Valuation allowance		328		(47)		(37)
Legal entity restructurings and intercompany transactions		(234)		(1)		(123)
Divestitures		—		(17)		—
Excess tax benefits from share-based payments		(8)		(6)		(15)
Other		21		(11)		33
Income tax expense (benefit)	$	(397)	$	364	$	306

(1)	The U.S. federal statutory rate was 21% for fiscal 2024, 2023, and 2022.

(2)	Excludes items which are separately presented.

The income tax benefit for fiscal 2024 included a $636 million net income tax benefit associated with a $972 million ten-year tax credit obtained by a Swiss subsidiary reduced by a $336 million valuation allowance related to the amount of the

tax credit not expected to be realized. In addition, the income tax benefit for fiscal 2024 included a $262 million income tax benefit related to the revaluation of deferred tax assets as a result of a corporate tax rate increase in Switzerland, as well as a $118 million income tax benefit associated with the tax impacts of a legal entity restructuring with related costs of $4 million recorded in selling, general, and administrative expenses for other non-income taxes.

The income tax expense for fiscal 2023 included a $49 million income tax benefit related to a decrease in the valuation allowance for certain U.S. tax loss and credit carryforwards.

The income tax expense for fiscal 2022 included a $124 million income tax benefit related to the tax impacts of certain intercompany transactions, a $64 million income tax benefit related primarily to a lapse of a statute of limitation, and a $51 million income tax benefit related to the release of a valuation allowance associated primarily with improved current and expected future operating profit and taxable income. In addition, the income tax expense for fiscal 2022 included $27 million of income tax expense related to the write-down of certain deferred tax assets to the lower corporate tax rate enacted in the canton of Schaffhausen and $12 million of income tax expense related to an income tax audit of an acquired entity. As we are entitled to indemnification of pre-acquisition period tax obligations under the terms of the purchase agreement, we recorded an associated indemnification receivable and other income of $11 million during fiscal 2022.

Deferred Tax Assets and Liabilities

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax asset were as follows:


	Fiscal Year End
	2024		2023

	(in millions)
Deferred tax assets:
Accrued liabilities and reserves	$	417	$	387
Tax loss and credit carryforwards		10,075		8,547
Inventories		81		78
Intangible assets		884		519
Pension and postretirement benefits		84		70
Deferred revenue		10		10
Interest		524		468
Lease liabilities		85		84
Other		3		15
Gross deferred tax assets		12,163		10,178
Valuation allowance		(8,285)		(7,416)
Deferred tax assets, net of valuation allowance		3,878		2,762

Deferred tax liabilities:
Property, plant, and equipment		(93)		(96)
Write-down of investments in subsidiaries		(244)		(95)
Lease ROU assets		(84)		(82)
Other		(159)		(74)
Total deferred tax liabilities		(580)		(347)

Net deferred tax assets	$	3,298	$	2,415

Our tax loss and credit carryforwards (tax effected) at fiscal year end 2024 were as follows:


	Expiration Period
			Fiscal 2030
	Through		Through		No
	Fiscal 2029		Fiscal 2044		Expiration		Total

	(in millions)
U.S. Federal:
Net operating loss carryforwards	$	162	$	217	$	58	$	437
Tax credit carryforwards		53		109		—		162
U.S. State:
Net operating loss carryforwards		26		13		6		45
Tax credit carryforwards		5		1		6		12
Non-U.S.:
Net operating loss carryforwards		169		6,816		1,401		8,386
Tax credit carryforwards		1		987		1		989
Capital loss carryforwards		3		—		41		44
Total tax loss and credit carryforwards	$	419	$	8,143	$	1,513	$	10,075

The valuation allowance for deferred tax assets of $8,285 million and $7,416 million at fiscal year end 2024 and 2023, respectively, related principally to the uncertainty of the utilization of certain deferred tax assets, primarily tax loss and credit carryforwards in various jurisdictions. During fiscal 2024, the valuation allowance increased primarily, as discussed above, by $336 million related to the portion of a tax credit obtained by a Swiss subsidiary not expected to be realized and by $281 million for a non-U.S. subsidiary intercompany transaction with a corresponding increase to deferred tax assets. In addition, a $247 million increase in the valuation allowance was associated with net write-downs of investments in subsidiaries in certain jurisdictions, with a corresponding increase to tax loss and credit carryforwards. We believe that we will generate sufficient future taxable income to realize the income tax benefits related to the remaining net deferred tax assets on the Consolidated Balance Sheet.

We have provided income taxes for earnings that are currently distributed as well as the taxes associated with several subsidiaries’ earnings that are expected to be distributed in the future. No additional provision has been made for Swiss or non-Swiss income taxes on the undistributed earnings of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such earnings are expected to be permanently reinvested, the investments are essentially permanent in duration, or we have concluded that no additional tax liability will arise as a result of the distribution of such earnings. As of fiscal year end 2024, certain subsidiaries had approximately $39.0 billion of cumulative undistributed earnings that have been retained indefinitely and reinvested in our global manufacturing operations, including working capital; property, plant, and equipment; intangible assets; and research and development activities. A liability could arise if our intention to permanently reinvest such earnings were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed. It is not practicable to estimate the additional income taxes related to permanently reinvested earnings or the basis differences related to investments in subsidiaries. As of fiscal year end 2024, we had approximately $4.7 billion of cash, cash equivalents, and intercompany deposits, principally in our subsidiaries, that we have the ability to distribute to TEGSA, our Luxembourg subsidiary, which is the obligor of substantially all of our debt, and to TE Connectivity plc, our now parent company, but we consider to be permanently reinvested. We estimate that an immaterial amount of tax expense would be recognized on the Consolidated Financial Statements if our intention to permanently reinvest these amounts were to change. Our current plans do not demonstrate a need to repatriate cash, cash equivalents, and intercompany deposits that are designated as permanently reinvested in order to fund our operations, including investing and financing activities.

Uncertain Tax Positions

The following table summarizes the activity related to unrecognized income tax benefits:


	Fiscal
	2024		2023		2022

	(in millions)
Balance at beginning of fiscal year	$	454	$	287	$	359
Additions for tax positions related to prior years		8		78		10
Reductions for tax positions related to prior years		(4)		(1)		(17)
Additions for tax positions related to the current year		214		107		37
Current year acquisitions		—		1		—
Settlements		(5)		(2)		(2)
Reductions due to lapse of applicable statutes of limitations		(15)		(16)		(100)
Balance at end of fiscal year	$	652	$	454	$	287

The total amount of unrecognized tax benefits that, if recognized, would reduce income tax expense and the effective tax rate were $485 million, $327 million, and $272 million at fiscal year end 2024, 2023, and 2022, respectively.

We record accrued interest and penalties related to uncertain tax positions as part of income tax expense (benefit). As of fiscal year end 2024 and 2023, we had $80 million and $65 million, respectively, of accrued interest and penalties related to uncertain tax positions on the Consolidated Balance Sheets, recorded primarily in income taxes. During fiscal 2024, 2023, and 2022, we recognized income tax expense of $15 million, $11 million, and $3 million, respectively, related to interest and penalties on the Consolidated Statements of Operations.

We file income tax returns on a unitary, consolidated, or stand-alone basis in multiple state and local jurisdictions, which generally have statutes of limitations ranging from 3 to 4 years. Various state and local income tax returns are currently in the process of examination or administrative appeal.

Our non-U.S. subsidiaries file income tax returns in the countries in which they have operations. Generally, these countries have statutes of limitations ranging from 3 to 10 years. Various non-U.S. subsidiary income tax returns are currently in the process of examination by taxing authorities.

As of fiscal year end 2024, under applicable statutes, the following tax years remained subject to examination in the major tax jurisdictions indicated:


Jurisdiction		Open Years
Brazil		2019 through 2024
China		2014 through 2024
Czech Republic		2017 through 2024
France		2017 through 2024
Germany		2012 through 2024
Hong Kong		2018 through 2024
India		2012 through 2024
Ireland		2019 through 2024
Italy		2018 through 2024
Japan		2018 through 2024
Luxembourg		2019 through 2024
Mexico		2019 through 2024
Morocco		2022 through 2024
Singapore		2019 through 2024
South Korea		2019 through 2024
Spain		2020 through 2024
Switzerland		2020 through 2024
Thailand		2022 through 2024
United Kingdom		2022 through 2024
U.S.—federal		2021 through 2024

In most jurisdictions, taxing authorities retain the ability to review prior tax years and to adjust any net operating loss and tax credit carryforwards from these years that are utilized in a subsequent period.

Although it is difficult to predict the timing or results of our worldwide examinations, we estimate that approximately $30 million of unrecognized income tax benefits, excluding the impact relating to accrued interest and penalties, could be resolved within the next twelve months.

We are not aware of any other matters that would result in significant changes to the amount of unrecognized income tax benefits reflected on the Consolidated Balance Sheet as of fiscal year end 2024.

16. Earnings Per Share

The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows:


	Fiscal
	2024	2023	2022

	(in millions)
Basic	307	315	323
Dilutive impact of share-based compensation arrangements	2	2	2
Diluted	309	317	325

The following share options were not included in the computation of diluted earnings per share because the instruments’ underlying exercise prices were greater than the average market prices of our common shares and inclusion would be antidilutive:


	Fiscal
	2024	2023	2022

	(in millions)
Antidilutive share options	1	1	1

17. Shareholders’ Equity and Redeemable Noncontrolling Interest

Common Shares

During fiscal 2024, we were organized under the laws of Switzerland and the rights of holders of our shares were governed by Swiss law, our Swiss articles of association, and our Swiss organizational regulations. The par value of our common shares was stated in Swiss francs (“CHF”); however, we used the U.S. dollar as our reporting currency on the Consolidated Financial Statements.

Subject to certain conditions specified in our Swiss articles of association, we were authorized to increase our conditional share capital by issuing new shares in aggregate not exceeding 50% of our authorized shares. Additionally, in March 2024, our shareholders reapproved and extended, for a period of one year ending March 13, 2025, our board of directors’ authorization to issue additional new shares to a maximum of 120% and/or reduce shares to a minimum of 80% of the existing share capital, subject to certain conditions specified in our articles of association. During fiscal 2024, there were no increases or decreases in our share capital and, following our change in place of incorporation, these authorizations ended.

Common Shares Held in Treasury

At fiscal year end 2024, approximately 17 million common shares were held in treasury, all of which were owned by one of our subsidiaries. At fiscal year end 2023, approximately 10 million common shares were held in treasury, of which 4 million were owned by one of our subsidiaries. Shares held both directly by us and by our subsidiary are presented as treasury shares on the Consolidated Balance Sheets.

In fiscal 2024, 2023, and 2022, our shareholders approved the cancellation of six million, eight and a half million, and five million shares, respectively, purchased under our share repurchase program. These capital reductions by cancellation of shares were subject to a notice period, filing with the commercial register in Switzerland, and other requirements.

At the beginning of fiscal 2025, all treasury shares were cancelled in connection with our change in place of incorporation.

Contributed Surplus

As a result of cumulative equity transactions, including dividend activity and treasury share cancellations, our contributed surplus balance was reduced to zero with residual activity recorded against accumulated earnings as reflected on the Consolidated Statement of Shareholders’ Equity. To the extent that the contributed surplus balance continues to be zero, the impact of future transactions that normally would have been recorded as a reduction of contributed surplus will be recorded in accumulated earnings. Contributed surplus established for Swiss tax and statutory purposes (“Swiss Contributed Surplus”) is not impacted by our GAAP treatment.

Swiss Contributed Surplus, subject to certain conditions, is a freely distributable reserve. As of fiscal year end 2024 and 2023, Swiss Contributed Surplus was CHF 2,862 million and CHF 3,562 million, respectively (equivalent to $1,657 million and $2,454 million, respectively).

In connection with our change in place of incorporation, we expect future dividends to be made from accumulated earnings as defined under Irish GAAP.

Dividends

We paid cash dividends to shareholders of $2.48, $2.30, and $2.12 per share in fiscal 2024, 2023, and 2022, respectively.

Under Swiss law, subject to certain conditions, dividends paid from reserves from capital contributions (equivalent to Swiss Contributed Surplus) are exempt from Swiss withholding tax. Dividends on our shares were required to be approved by our shareholders.

Our shareholders approved the following dividends on our common shares:


Approval Date	Annual Payment Per Share	Payment Timing
March 2021	$2.00, payable in four quarterly installments of $0.50	Third quarter of fiscal 2021 Fourth quarter of fiscal 2021 First quarter of fiscal 2022 Second quarter of fiscal 2022
March 2022	$2.24, payable in four quarterly installments of $0.56	Third quarter of fiscal 2022 Fourth quarter of fiscal 2022 First quarter of fiscal 2023 Second quarter of fiscal 2023
March 2023	$2.36, payable in four quarterly installments of $0.59	Third quarter of fiscal 2023 Fourth quarter of fiscal 2023 First quarter of fiscal 2024 Second quarter of fiscal 2024
March 2024	$2.60, payable in four quarterly installments of $0.65	Third quarter of fiscal 2024 Fourth quarter of fiscal 2024 First quarter of fiscal 2025 Second quarter of fiscal 2025

The third and fourth installments of the dividends approved by our shareholders in March 2024 are expected to occur in fiscal 2025, subsequent to our merger with TE Connectivity plc and change in jurisdiction of incorporation. In accordance with the merger agreement, TE Connectivity plc has assumed these liabilities and is obligated to pay the dividend installments that were unpaid at the time of the merger.

As a result of our change in place of incorporation, beginning in our third quarter of fiscal 2025, future dividends on our ordinary shares, if any, will be declared on a quarterly basis by our board of directors as provided by Irish law. Shareholder approval is no longer required.

Upon shareholders’ approval of a dividend payment, we record a liability with a corresponding charge to shareholders’ equity. At fiscal year end 2024 and 2023, the unpaid portion of the dividends recorded in accrued and other current liabilities on the Consolidated Balance Sheets totaled $390 million and $368 million, respectively.

Share Repurchase Program

In fiscal 2024, our board of directors authorized an increase of $1.5 billion in our share repurchase program. Common shares repurchased under the share repurchase program were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Number of common shares repurchased		14		8		10
Repurchase value	$	1,991	$	946	$	1,409

At fiscal year end 2024, we had $245 million of availability remaining under our share repurchase authorization. See additional information regarding our share repurchase program in Note 21.

Redeemable Noncontrolling Interest

We own approximately 72% of our First Sensor AG (“First Sensor”) subsidiary. The noncontrolling interest holders can elect either (1) to remain First Sensor shareholders and receive recurring annual compensation of €0.56 per First Sensor share or (2) to put their First Sensor shares in exchange for compensation of €33.27 per First Sensor share. As the exercise of the put right by First Sensor noncontrolling interest shareholders is not within our control, our First Sensor noncontrolling interest balance is recorded as redeemable noncontrolling interest outside of equity on the Consolidated Balance Sheets as of fiscal year end 2024 and 2023.

18. Accumulated Other Comprehensive Income (Loss)

The changes in each component of accumulated other comprehensive income (loss) were as follows:


	Foreign		Unrecognized		Gains (Losses)		Accumulated
	Currency		Pension and		on Cash		Other
	Translation		Postretirement		Flow		Comprehensive
	Adjustments(1)		Benefit Costs		Hedges		Income (Loss)

	(in millions)
Balance at fiscal year end 2021	$	314	$	(475)	$	(7)	$	(168)
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications		(510)		344		(76)		(242)
Amounts reclassified from accumulated other comprehensive income (loss)		—		19		(26)		(7)
Income tax (expense) benefit		—		(104)		7		(97)
Other comprehensive income (loss), net of tax		(510)		259		(95)		(346)
Less: other comprehensive loss attributable to noncontrolling interests		19		—		—		19
Balance at fiscal year end 2022	$	(177)	$	(216)	$	(102)	$	(495)
Other comprehensive income, net of tax:
Other comprehensive income before reclassifications		251		21		31		303
Amounts reclassified from accumulated other comprehensive income (loss)		10		4		38		52
Income tax expense		—		(5)		(4)		(9)
Other comprehensive income, net of tax		261		20		65		346
Less: other comprehensive income attributable to noncontrolling interests		(9)		—		—		(9)
Balance at fiscal year end 2023	$	75	$	(196)	$	(37)	$	(158)
Other comprehensive income (loss), net of tax:
Other comprehensive income (loss) before reclassifications		130		(56)		102		176
Amounts reclassified from accumulated other comprehensive income (loss)		1		4		(18)		(13)
Income tax (expense) benefit		—		15		(8)		7
Other comprehensive income (loss), net of tax		131		(37)		76		170
Less: other comprehensive income attributable to noncontrolling interests		(7)		—		—		(7)
Balance at fiscal year end 2024	$	199	$	(233)	$	39	$	5

(1)	Includes hedges of net investment foreign currency exchange gains or losses which offset foreign currency exchange losses or gains attributable to the translation of the net investments.

19. Share Plans

During fiscal 2024, shareholders approved our 2024 Stock and Incentive Plan (the “2024 Plan”). The 2024 Plan replaced our 2007 Stock and Incentive Plan, as amended and restated (the “2007 Plan”), as the source of awards granted. No further awards will be granted under the 2007 Plan and all remaining shares available under the 2007 Plan have been cancelled.

Our equity compensation plans, of which the 2024 Plan is the primary plan, provide for the award of annual performance bonuses and long-term performance awards, including share options; restricted, performance, and deferred share units; and other share-based awards (collectively, “Awards”) and allow for the use of unissued shares or treasury shares to be used to satisfy such Awards. As of fiscal year end 2024, the 2024 Plan provided for a maximum of 20 million shares to be issued as Awards, subject to adjustment as provided under the terms of the plan. We had 20 million shares available for issuance under the 2024 Plan as of fiscal year end 2024.

Share-Based Compensation Expense

Share-based compensation expense, which was included in selling, general, and administrative expenses on the Consolidated Statements of Operations, was as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Share-based compensation expense	$	127	$	123	$	119

We recognized a related tax benefit associated with our share-based compensation arrangements of $25 million, $25 million, and $24 million in fiscal 2024, 2023, and 2022, respectively.

Restricted Share Awards

Restricted share awards, which are generally in the form of restricted share units, are granted subject to certain restrictions. Conditions of vesting are determined at the time of grant. All restrictions on an award will lapse upon death or disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Recipients of restricted share units have no voting rights, but do receive dividend equivalents. For grants that vest through passage of time, the fair value of the award at the time of the grant is amortized to expense over the period of vesting. The fair value of restricted share awards is determined based on the closing value of our shares on the grant date. Restricted share awards generally vest in increments over a period of four years as determined by the management development and compensation committee of our board of directors.

Restricted share award activity was as follows:


		Weighted-Average
		Grant-Date
	Shares	Fair Value
Nonvested at fiscal year end 2023	1,479,275	$	129.48
Granted	632,628		135.32
Vested	(575,494)		126.15
Forfeited	(107,208)		130.66
Nonvested at fiscal year end 2024	1,429,201	$	133.29

The weighted-average grant-date fair value of restricted share awards granted during fiscal 2024, 2023, and 2022 was $135.32, $124.92, and $150.99, respectively.

The total fair value of restricted share awards that vested during fiscal 2024, 2023, and 2022 was $73 million, $54 million, and $44 million, respectively.

As of fiscal year end 2024, there was $87 million of unrecognized compensation expense related to nonvested restricted share awards, which is expected to be recognized over a weighted-average period of 1.7 years.

Performance Share Awards

Performance share awards, which are generally in the form of performance share units, are granted with pay-out subject to vesting requirements and certain performance conditions that are determined at the time of grant. Based on our performance, the pay-out of performance share units can range from 0% to 200% of the number of units originally granted. The grant-date fair value of performance share awards is expensed over the period of performance once achievement of the performance criteria is deemed probable. Recipients of performance share units have no voting rights but do receive dividend equivalents. Performance share awards generally vest after a period of three years as determined by the management development and compensation committee of our board of directors.

Performance share award activity was as follows:


		Weighted-Average
		Grant-Date
	Shares	Fair Value
Outstanding at fiscal year end 2023	471,344	$	126.44
Granted	206,342		129.05
Vested	(192,088)		104.69
Forfeited	(17,600)		134.85
Outstanding at fiscal year end 2024	467,998	$	136.11

The weighted-average grant-date fair value of performance share awards granted during fiscal 2024, 2023, and 2022 was $129.05, $120.06, and $157.56, respectively.

The total fair value of performance share awards that vested during fiscal 2024, 2023, and 2022 was $20 million, $17 million, and $12 million, respectively.

As of fiscal year end 2024, there was $25 million of unrecognized compensation expense related to nonvested performance share awards, which is expected to be recognized over a weighted-average period of 1.2 years.

Share Options

Share options are granted to purchase our common shares at prices which are equal to or greater than the market price of the common shares on the date the option is granted. Conditions of vesting are determined at the time of grant. All restrictions on the award will lapse upon death or disability of the employee. If the employee satisfies retirement requirements, all or a portion of the award may vest, depending on the terms and conditions of the particular grant. Options generally vest and become exercisable in equal annual installments over a period of four years and expire ten years after the date of grant.

Share option award activity was as follows:


				Weighted-Average
		Weighted-Average		Remaining	Aggregate
		Exercise		Contractual	Intrinsic
	Shares	Price		Term	Value
				(in years)	(in millions)
Outstanding at fiscal year end 2023	5,618,649	$	105.73
Granted	880,150		131.86
Exercised	(976,155)		89.08
Forfeited	(139,359)		132.32
Outstanding at fiscal year end 2024	5,383,285	$	112.33	6.1	$	214
Vested and expected to vest at fiscal year end 2024	5,314,593	$	112.09	6.0	$	213
Exercisable at fiscal year end 2024	3,273,955	$	100.41	4.8	$	169

The weighted-average exercise price of share option awards granted during fiscal 2024, 2023, and 2022 was $131.86, $124.56, and $157.02, respectively.

The total intrinsic value of options exercised during fiscal 2024, 2023, and 2022 was $59 million, $30 million, and $49 million, respectively. We received cash related to the exercise of options of $89 million, $43 million, and $54 million in fiscal 2024, 2023, and 2022, respectively.

As of fiscal year end 2024, there was $24 million of unrecognized compensation expense related to nonvested share options granted under our share option plans, which is expected to be recognized over a weighted-average period of 1.6 years.

Share-Based Compensation Assumptions

The grant-date fair value of each share option grant was estimated using the Black-Scholes-Merton option pricing model. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. We employ our historical share volatility when calculating the grant-date fair value of our share option grants using the Black-Scholes-Merton option pricing model. Currently, we do not have exchange-traded options of sufficient duration to employ an implied volatility assumption in the calculation and therefore rely solely on the historical volatility calculation. The average expected life was based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. The risk-free interest rate was based on U.S. Treasury zero-coupon issues with a remaining term that approximated the expected life assumed at the date of grant. The expected annual dividend per share was based on our expected dividend rate. The recognized share-based compensation expense was net of estimated forfeitures, which are based on voluntary termination behavior as well as an analysis of actual option forfeitures.

The weighted-average grant-date fair value of options granted and the weighted-average assumptions we used in the Black-Scholes-Merton option pricing model were as follows:


	Fiscal
	2024			2023			2022
Weighted-average grant-date fair value	$	39.79		$	35.90		$	37.51

Assumptions:
Expected share price volatility		31	%		31	%		29	%
Risk-free interest rate		4.6	%		4.0	%		1.2	%
Expected annual dividend per share	$	2.36		$	2.24		$	2.00
Expected life of options (in years)		5.3			5.1			5.1

20. Segment and Geographic Data

During fiscal 2024, we operated through three reportable segments: Transportation Solutions, Industrial Solutions, and Communications Solutions. See Note 1 for a description of our fiscal 2024 segments. Also see Note 21 for information regarding our new segment structure effective for fiscal 2025.

Segment performance is evaluated based on net sales and operating income. Generally, we consider all expenses to be of an operating nature and, accordingly, allocate them to each reportable segment. Costs specific to a segment are charged to the segment. Corporate expenses, such as headquarters administrative costs, are allocated to the segments based on segment operating income. Intersegment sales are not material. Corporate assets are allocated to the segments based on segment assets.

Net sales by segment and industry end market(1) were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Transportation Solutions:
Automotive	$	6,956	$	6,951	$	6,527
Commercial transportation		1,456		1,525		1,582
Sensors		986		1,112		1,110
Total Transportation Solutions		9,398		9,588		9,219
Industrial Solutions:
Industrial equipment		1,385		1,706		1,904
Aerospace, defense, and marine		1,344		1,178		1,087
Energy		919		883		804
Medical		833		784		695
Total Industrial Solutions		4,481		4,551		4,490
Communications Solutions:
Data and devices		1,274		1,162		1,606
Appliances		692		733		966
Total Communications Solutions		1,966		1,895		2,572
Total	$	15,845	$	16,034	$	16,281

	(1)	Industry end market information is presented consistently with our internal management reporting and may be revised periodically as management deems necessary.

Net sales by geographic region and segment were as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Europe/Middle East/Africa (“EMEA”):
Transportation Solutions	$	3,548	$	3,848	$	3,490
Industrial Solutions		2,083		2,046		1,862
Communications Solutions		268		314		355
Total EMEA		5,899		6,208		5,707
Asia–Pacific:
Transportation Solutions		3,701		3,439		3,537
Industrial Solutions		626		732		827
Communications Solutions		1,040		985		1,407
Total Asia–Pacific		5,367		5,156		5,771
Americas:
Transportation Solutions		2,149		2,301		2,192
Industrial Solutions		1,772		1,773		1,801
Communications Solutions		658		596		810
Total Americas		4,579		4,670		4,803
Total	$	15,845	$	16,034	$	16,281

Operating income by segment was as follows:


	Fiscal
	2024		2023		2022

	(in millions)
Transportation Solutions	$	1,847	$	1,451	$	1,534
Industrial Solutions		588		602		607
Communications Solutions		361		251		615
Total	$	2,796	$	2,304	$	2,756

No single customer accounted for a significant amount of our net sales in fiscal 2024, 2023, or 2022.

As we are not organized by product or service, it is not practicable to disclose net sales by product or service.

Depreciation and amortization and capital expenditures were as follows:


	Depreciation and
	Amortization						Capital Expenditures
	Fiscal						Fiscal
	2024		2023		2022		2024		2023		2022

	(in millions)
Transportation Solutions	$	516	$	484	$	505	$	427	$	468	$	483
Industrial Solutions		221		210		194		146		171		153
Communications Solutions		89		100		86		107		93		132
Total	$	826	$	794	$	785	$	680	$	732	$	768

Segment assets and a reconciliation of segment assets to total assets were as follows:


	Segment Assets
	Fiscal Year End
	2024		2023		2022

	(in millions)
Transportation Solutions	$	5,679	$	5,678	$	5,530
Industrial Solutions		2,716		2,623		2,428
Communications Solutions		1,080		972		1,150
Total segment assets(1)		9,475		9,273		9,108
Other current assets		2,059		2,373		1,727
Other non-current assets		11,320		10,066		9,947
Total assets	$	22,854	$	21,712	$	20,782

	(1)	Segment assets are composed of accounts receivable, inventories, and net property, plant, and equipment.

Net sales and net property, plant, and equipment by geographic region were as follows:


							Property, Plant, and
	Net Sales(1)						Equipment, Net
	Fiscal						Fiscal Year End
	2024		2023		2022		2024		2023		2022

	(in millions)
EMEA:
Switzerland	$	3,906	$	4,111	$	3,709	$	7	$	6	$	16
Germany		236		405		561		586		637		597
Other EMEA		1,757		1,692		1,437		1,060		965		821
Total EMEA		5,899		6,208		5,707		1,653		1,608		1,434
Asia–Pacific:
China		3,571		3,182		3,589		844		794		779
Other Asia–Pacific		1,796		1,974		2,182		332		294		296
Total Asia–Pacific		5,367		5,156		5,771		1,176		1,088		1,075
Americas:
U.S.		4,020		4,107		4,280		953		933		947
Other Americas		559		563		523		121		125		111
Total Americas		4,579		4,670		4,803		1,074		1,058		1,058
Total	$	15,845	$	16,034	$	16,281	$	3,903	$	3,754	$	3,567

(1)	Net sales to external customers are attributed to individual countries based on the legal entity that records the sale.

21. Subsequent Events

Change in Place of Incorporation

Our merger with TE Connectivity plc, our wholly-owned subsidiary, was completed on September 30, 2024, thereby changing our jurisdiction of incorporation from Switzerland to Ireland. Our shareholders received one ordinary share of TE Connectivity plc for each common share of TE Connectivity Ltd. held immediately prior to the merger. Effective for fiscal 2025, we are organized under the laws of Ireland. We do not anticipate any material changes in our operations or financial results as a result of the merger and change in place of incorporation.

Share Repurchase Program

On October 30, 2024, our board of directors authorized an increase of $2.5 billion in our share repurchase program.

New Segment Structure Effective for Fiscal 2025

Effective for the first quarter of fiscal 2025, we will reorganize our management and segments to align the organization around our fiscal 2025 strategy. Our businesses in the Communications Solutions segment will be moved into the Industrial Solutions segment. Also, the appliances and industrial equipment businesses will be combined to form the automation and connected living business. In addition, we will realign certain product lines and businesses from the Industrial Solutions and Communications Solutions segments to the Transportation Solutions segment. The following represents the new segment structure:

	●	Transportation Solutions—This segment will contain our automotive, commercial transportation, and sensors businesses.

	●	Industrial Solutions—This segment will contain our aerospace, defense, and marine; medical; energy; digital data networks (historically referred to as data and devices); and automation and connected living businesses.

In the Consolidated Financial Statements, results for fiscal 2024 and prior periods are reported on the basis under which we managed our business in fiscal 2024 and do not reflect the fiscal 2025 segment reorganization.

TE CONNECTIVITY LTD.

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Fiscal Years Ended September 27, 2024, September 29, 2023, and September 30, 2022


			Additions
	Balance at		Charged to		Acquisitions,		Write-offs		Balance at
	Beginning of		Costs and		Divestitures,		and		End of
Description	Fiscal Year		Expenses		and Other		Deductions		Fiscal Year

	(in millions)
Fiscal 2024:
Allowance for doubtful accounts receivable	$	30	$	15	$	2	$	(15)	$	32
Valuation allowance on deferred tax assets		7,416		916		—		(47)		8,285

Fiscal 2023:
Allowance for doubtful accounts receivable	$	45	$	(1)	$	—	$	(14)	$	30
Valuation allowance on deferred tax assets		7,112		406		—		(102)		7,416

Fiscal 2022:
Allowance for doubtful accounts receivable	$	41	$	15	$	(7)	$	(4)	$	45
Valuation allowance on deferred tax assets		2,729		4,463		—		(80)		7,112

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